Protecting customers who are somehow able to shop online but are unable to read. That seems to be the goal of a recent Ninth Circuit ruling in a trademark case filed against Amazon. In a case between MTM and Amazon, the court ruled that Amazon is misleading consumers by providing search results that don’t explicitly state that the product you searched for is not carried. It’s like if I visited a sporting goods store and asked a clerk to see the Nike tennis shirts. If the store didn’t carry Nike shirts and the clerk simply pointed you to the tennis goods section, would the clerk’s actions reasonably mislead me into believing that every shirt in the tennis section is a Nike shirt? Of course not.
The Amazon trademark case is essentially the scenario described above. Amazon doesn’t carry MTM watches. Customers that search for “MTM Special Ops” on Amazon.com are simply provided with a list of watches from from other brands. While the search results do not explicitly state that Amazon does not carry MTM watches, the search results do clearly state the brand names of the watches being sold. Nevertheless, MTM argued that Amazon’s search results constituted trademark infringement.
Initially, a district court granted summary judgment to Amazon, holding that Amazon’s actions did not create a likelihood of confusion for customers. However, the Ninth Circuit Court of Appeals reversed and ordered the case to proceed to trial. The reversal is based up a trademark doctrine called “initial interest confusion.” The court’s opinion, summarized the doctrine as:
Initial interest confusion occurs not where a customer is confused about the source of a product at the time of purchase, but earlier in the shopping process, if “customer confusion… creates initial interest in a competitor’s product.” Even if that confusion is dispelled before an actual sale occurs, initial interest confusion still constitutes trademark infringement because it “impermissibly capitalizes on the goodwill associated with a mark and is therefore actionable trademark infringement.”
This whole doctrine is silly. This issue could cover a whole range of traditional sales methods, including product placement. Is a store not allowed to put Nike and Adidas shirts on the same rack? What about placing generic items on the shelves next to brand names?
The dissenting judge pointed out how curious the majority’s ruling is with respect to Amazon:
Because Amazon’s search results page clearly labels the name and manufacturer of each product offered for sale and even includes photographs of the items, no reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products….The search results page makes clear to anyone who can read English that Amazon only carries the brands of watches that are clearly and explicitly listed on the web page. The search results page is unambiguous.
We’ll just have to wait see what a jury has to say about this whole thing. We suspect a reasonable jury would tell MTM to take a hike.